Electronics Mart submits draft papers for Rs 500-crore IPO

Consumer durables and electronics retail chain Electronics Mart India Ltd has filed its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India for an initial public offering.

The Hyderabad-based company aims to raise Rs 500 crore by selling fresh shares in the IPO. The IPO doesn’t include any offer for sale by existing shareholders.

The company intends to use the net proceeds to finance its capital expenditure and meet its working capital requirements to the tune of Rs 133.8 crore and Rs 200 crore, respectively.

In addition, it plans to use Rs 50 crore to pay off its debt. It will use the remaining money for general corporate purposes.

IIFL Securities, JM Financial and Anand Rathi Advisors are arranging the IPO.

Electronics Mart’s business

The company was founded by Pavan Kumar Bajaj and Karan Bajaj in 1980 as a proprietary concern. It began as a consumer durables and electronics store under the name of ‘Bajaj Electronics’.

It is now the fourth-largest consumer durable and electronics retailer in India and largest player in the southern region in revenue terms as of financial year 2019-20. It is especially dominant in Telangana and Andhra Pradesh.

EMIL has 7.5 lakh square feet of retail space across more than 90 stores. It has a workforce of over 2,600 people.

Its multi-brand outlets operate under the Bajaj Electronics brand. It also runs two specialized stores under the name of ‘Kitchen Stories’ catering to kitchen-specific requirements.

The company is also setting up another niche outlet under the name of ‘Audio & Beyond’ for high-end audio and home automation products.

It plans to deepen its store network in Andhra Pradesh and Telangana and gradually expand in the national capital region, the DRHP showed.

EMIL displays more than 6,000 stock keeping units (SKUs) ranging from large appliances such as air conditioners, washing machines, televisions and refrigerators as well as mobiles and small appliances, besides other IT peripherals. It houses products from more than 70 consumer durables and electronic brands.

The company’s total income for the year through 2020-21 inched up to Rs 3,207.37 crore from Rs 3,179 crore the year before despite the restrictions related to the coronavirus pandemic.

Its net profit for 2020-21, however, declined to Rs 58.62 crore from Rs 81.61 crore as consumer spending fell because of the pandemic.